FAQ – Affordable Care Act

What is the Affordable Care Act?

The Affordable Care Act (also referred to as ACA, Patient Protection Affordable Care Act (PPACA) or “Obamacare”) is a comprehensive health care reform law enacted in March 2010. The three primary goals of the Affordable Care Act is to:

• Make affordable health insurance coverage available to more people. The law provides consumers with subsidies or premium tax credits that lower costs for households with incomes between 100%-400% of the Federal Poverty Level. If your income is above 400% Federal Poverty Level, you may still qualify for a premium tax credit. If your income is at or below 150% Federal Poverty Level, you may qualify to enroll in or change Marketplace coverage through a Special Enrollment Period. Every year, a new measure of income is issued by the Department of Health and Human Services.
• Expand the Medicaid program to cover all adults with income below 138% of the Federal Poverty Level. Note, not all states have expanded their Medicaid programs.)
• Support innovative medical care delivery methods designed to lower the costs of health care in general.

You can read the entire bill here

Affordable Health Coverage sounds amazing! When can I enroll?

Open Enrollment begins on November 1st and runs until January 15th. If you enroll between November 1 – December 15, your coverage effective start date will be January 1. If you enroll between December 16 – January 15, your coverage effective start date will be February 1.

After January 15th, you can ONLY get a health plan if you qualify for a Special Enrollment Period. Certain life events can trigger a Special Enrollment Period, such as loss of coverage, moving, marriage, having a baby, adopting a child, or if your household income is below a certain amount.

What if I decide not to enroll in health insurance?

Those who do not maintain “minimum essential” healthcare coverage will be required to make a penalty payment to the IRS when he/she pays income taxes each applicable year. Penalties assessed annually are subject to increases each year. There is no penalty imposed for those persons who are without coverage for less than three months during the designated tax year. There are some exemptions if qualified. These include having income below 100% of the Federal Poverty Level and the purchase would cause financial hardship, not being required to file income taxes, having a coverage gap of less than three months, religious objections, or being American Indian, an undocumented immigrant or currently incarcerated (unless pending disposition).

Who can benefit from ACA?

The ACA Health Insurance Marketplace gives individuals and families a new option to purchase health insurance. There is also a marketplace for small businesses. These marketplaces are most useful for consumers who don’t have access to employer-based coverage and don’t qualify for programs like Medicaid. Those with incomes between 100%-400% of the Federal Poverty Level will receive income-based subsidies to help them afford coverage. Small businesses also receive tax credits to help them afford coverage for their employees.

What is the age limit my child can stay on my plan?

A child may remain on a parent’s plan until the end of the year in which the child turns age 26. Children are permitted to join or remain on a parent’s plan even if they are married, not living with their parents, attending school, not financially dependent on their parents, or eligible to enroll in their employer’s plan.

I recently lost employment, should I consider COBRA or marketplace coverage?

Consider both and weigh your options. After a job loss or reduction in hours, your company may offer you coverage under the Consolidated Omnibus Budget Reconciliation Act (COBRA). This is an opportunity to continue your current health coverage for typically up to 18 months at an increased personal cost, since you will be paying the portion your employer used to pay.

If you already have enrolled in coverage through COBRA, you must either wait for open enrollment in the fall or wait for your COBRA benefits to expire before you can enroll through a Special Enrollment Period.

If you have not yet enrolled in COBRA, you can estimate the cost and benefits of Marketplace coverage to compare with that of COBRA. 

For small businesses

Small businesses can compare and select from qualified health plans from private insurers and select the plans that suit their needs and budgets. There is no specific enrollment period, so you can sign up any time. There is also an “employee choice” model that allows you to offer multiple carriers to your employees instead of one single carrier. Small businesses are able to qualify for tax credits up to 50% if they contribute to the cost of employee coverage. Eligibility of the tax credit is based on (1) you contribute at least 50% toward employee premium costs, (2) you employ 25 or fewer full-time employees, and (3) you pay an average annual salary of less than $50,000. This includes contributions to dental, vision and hearing. Employers with 10 or fewer full-time employees paying an annual wage of $25,000 or less are eligible for the maximum tax credit.